Dow Jones Futures: Why This Market Is Worse Than A Bear Market; Tesla Stock, Microsoft Stock, Cisco Stock

Dow Jones futures rose late Tuesday, along with S&P 500 futures and Nasdaq futures, after Huawei CFO Meng Wanzhou was granted bail, easing China trade war fears. The current volatile stock action is worse in many ways than a stock market correction or full-blown bear market. When stocks do flash buy signals — like Tesla (TSLA), Edwards Lifesciences (EW), Microsoft (MSFT), Cisco Systems (CSCO) or Visa (V) in recent days — the odds are high that the market will shift lower for an hour, day or week. Tesla stock and Edwards Lifesciences stock both cleared buy points intraday but pared gains to close back below their entries as the stock market faded into the close. Dow Jones components Microsoft stock, Cisco stock and Visa stock peeked out into buy zones on Dec. 3, but quickly retreated.


Dow Jones Futures Today

Dow Jones futures rose 0.6% above fair value. S&P 500 futures climbed 0.6%. Nasdaq 100 futures jumped 0.8%. Stock futures got a boost as a Canada judge granted Huawei CFO Meng Wanzhou bail, easing China trade-war tensions. President Donald Trump told Reuters in an interview published soon after the bail news that he’d consider intervening in the Huawei CFO case if it served national security and helped with a China trade deal.

Earlier Tuesday, China moved to lower tariffs on U.S.-made from 40% to the 15% that other foreign-made cars pay.

Stock Market Roller Coaster

In a bear market, savvy investors know to get out. In the current market uptrend under pressure, investors still have hope, leading to risky decision-making.

A key tenet of CAN SLIM investing is to buy leading stocks as they are breaking out at or near highs. That maximizes the chances that a stock will rise, and rise significantly. But that assumes the stock market is in a healthy uptrend. In a choppy market, there may be an upswing for a few hours or days followed by downswings.

In almost all cases, a stock will clear a buy point when the market is on a short-term upswing. That raises the risk that you’ll buy at or near a short-term peak, and quickly suffer losses.

Tesla Stock, Edwards Lifesciences Stock

Tesla stock rose as high as 372.17, moving past a 366.85 buy point for the third time in five sessions. But shares then reversed to as low as 360.23 before rebounding to close up 0.4% at 366.76.

Edwards Lifesciences stock just cleared a 165.41 entry intraday only to slip back to 163.19 at the close, up 0.8%.

Cisco Stock

On Dec. 3, Cisco stock managed to close above a buy point. Unfortunately, that also marked a short-term peak for the major averages. Cisco shares retreated over the next few sessions, falling 5.6% below the buy point intraday on Dec. 10.

Microsoft Stock, Visa Stock

Microsoft stock and Visa stock tiptoed past double-bottom buy points on Dec. 3, but unlike Cisco stock couldn’t even close above the entry. Both pulled back, especially Visa.

Microsoft and Cisco stock did form new handles and buy points in their consolidations on Tuesday, with their relative strength lines at or near new highs. Visa stock has a handle-like formation, but it’s too low in the base to present a valid buying opportunity.

The five stocks cited above are relatively mild scenarios. But in a choppy market with a downward bias, the risks are that a stock will simply plunge.

Ulta Beauty Stock Takes Ugly Turn

Ulta Beauty (ULTA) had a powerful breakout on Nov. 8 and kept rising as much as 11% from the buy point. Shares pulled back and briefly round-tripped that double-digit gain, a strong sell signal, heading into earnings. Ulta Beauty failed to impress investors, sending the stock plunging 13% last Friday and continuing to retreat this week.

Perhaps the stock market will shake off its intraday swings and move solidly higher for several sessions. That would be a good sign, but could also be a bear trap. Investors should consider staying on the sidelines until the market uptrend takes a firmly positive tone. If you stay invested, remain alert and cautious.


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Originally posted 2019-09-19 23:27:48.


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